> you don't want your investment to get hit by a bus
So take out life insurance on the founder.
And if two founders are essential for a successful startup, then there is actually twice as much chance of it failing by one of them being hit by a bus.
A typical pair is a business guy and an IP guy. You don't have twice the risk because it is assumed that they talk to each other, and you could replace either based on what the other could fill in.
You can only insure for the amount of your investment, that offsets the risk but doesn't cover your gains. Also since the cost to do so is 1/10th of your investment over 3 years, you would typically not opt for the coverage. I don't know of an investor who does.
There is also a belief that no one guy is "that smart" that anything 1 person can build has any competitive advantage.
So take out life insurance on the founder.
And if two founders are essential for a successful startup, then there is actually twice as much chance of it failing by one of them being hit by a bus.